I’m a serial tenant. There’s nothing wrong with renting. On the whole it’s a worry-free life. If the washing machine breaks, I call my landlords and they are good people so they get it fixed up as soon as they can. I rent privately so my exposure to dreaded estate agents is (mercifully) low. I’m also free to move as frequently as my contract permits, which is flexibility I appreciate. However I get fed up with the limitations. It’s hard to have real pride in a place which is never really your own. And when I want to drill a hole in the wall I want to pick up a drill, not write a carefully worded email (with illustrations) to my landlord. I wouldn’t mind those tens of thousands of pounds sitting in my name in one of the most consistent investment markets either. Instead I give them to somebody else to make money for them.
And so it is that every six months or so I go through the optimistic but ultimately heartbreaking process of looking for a place of my own, with the eventual realisation that between arrangement fees, stamp duty, deposit, valuations and the rest, I just can’t afford to buy. Pretty much the only people I know who can have parental assistance which I would prefer to get by without even if the option existed.
Around a month ago, with a failed attempt to move due to inflated rental rates behind me, I embarked on this process once again. After a few days of enthusiastic chats with mortgage brokers I drew the sickening conclusion that I could only stretch to buying a house at this stage if I didn’t live in it. That is to say most brokers would offer me a buy-to-let mortgage with a better rate, lower tax, and higher LTV than an equivalent owner-occupier mortgage.
I am being priced out of the rental market and the government are doing their best to make sure that I can’t take that wild leap onto the property ladder by giving buy-to-let landlords a tax break.
I am struggling to see the motivation for such a move. Perhaps some genius saw an illustration of the current rental market and quizzically pondered “how can we relieve the burden on our strained rental market?” Having presumably been employed for his/her encyclopedic knowledge of economics and ability to think outside the box, supply and demand principles must have come to mind. And as supply typically comes before demand, in the phrase if not alphabetically, our hero rushed to the conclusion that we must get more individuals investing in properties they intend to let. And as such, eyes straining from the glare of the light bulb above his head, Johnny Treasury drafted a range of incentives to encourage those potential buy-to-let homeowners in search of additional income through extended borrowing against the incomes of their future tenants.
I could ramble on for hours. And no, I’m not qualified to. Adam Smith I am not. But I do have to get to the bank before I miss my landlord’s next mortgage payment.